Question A firm issues both stocks and corporate bonds. You are given: i. Current stock price is $25 per share, and there are 45000 outstanding shares in the market. ii. The stock's beta is 1.39. iii. The firm has 500 outstanding bonds rated A. iv. Bond price is $1000 and yield-to-maturity is 2%. v. Bonds are subject to a default rate of 2.5%, and the expected loss rate given default is 75%. vi. The risk-free rate is 1%. vii. The market risk premium is 6.5%. viii. Current corporate tax rate is 33.5%, The firm does not hold cash. Calculate the weighted average cost of capital Possible Answers